Reports over the weekend suggested that the United States’ National Security Agency, a spy agency, had been able to tap into the servers of nine internet giants at will for the past several years using a system codenamed Prism. But they have unravelled.

The National Security Agency and the internet companies themselves have all denied the claims. The newspapers that got the supposed scoop – a PowerPoint presentation leaked by on-the-run defence contractor Edward Snowden – have significantly modified their reports.

Most New Zealanders use either Google’s Gmail service or Telecom’s email service, which is outsourced to Yahoo. Google and Yahoo were both implicated in the scare.

If the NSA really had open slather to their servers, either through the acquiescence of the companies or by hacking their servers, as implied by the initial reports on Prism, then its agents would have been free since 2009 to read most New Zealanders’ emails.

Also an open book to the spy agency would be most people’s internet search histories, social networking activities and instant messages over the past several years.

However, the companies concerned have denied giving the NSA such a “back door”, and United States National Intelligence Director James Clapper has denied having one.

So what do they have?

Since 2008, the US government has been able to use Section 702 of the US Foreign Intelligence Surveillance Act (Fisa) to demand the co-operation of “electronic communications companies” with a presence on US soil when snooping on named foreign nationals.

US government agencies are required to have reason to believe each individual poses a security threat and their demands are subject to approval by a special court, though since that court meets in secret there is inevitably a suspicion such requests are always “rubber-stamped”.

Those snooping powers themselves, while controversial, have never been secret however. There is a gulf between them and the implications of the original reports concerning Prism, which strongly suggested the NSA could simply help itself to whatever it wanted, whenever it liked.

Prism is simply a boring internal tool used to analyse the results of such legal searches, according to Clapper’s explanation. That ties in with the fact that Snowden, clearly a relatively junior defence contractor (and there’s some clue there surely), had access to information about the program.

Could US spooks use Fisa to spy on your emails and internet searches if they wanted to? Very likely, if they could be bothered, but they would need to first have a specific interest in you. Nothing has changed in that respect.

Have they been harvesting our emails and internet records en masse, sticking them in an NSA datacentre and then scanning them to fish for evidence of any illegal activity?

There is no evidence to suggest that. If they have, Prism doesn’t appear to be the tool they are using.

The proposal that the Government take a direct stake in Telecom’s network arm Chorus is alive and well, after briefly being misdiagnosed with an acute case of “copper-poisoning”.

Telecom chief executive Paul Reynolds was leaning towards a full demerger of Chorus when he briefed analysts on options for the possible breakup of Telecom on Thursday, the idea being that Telecom shareholders would be issued with shares in Chorus, which would become a separate listed company.

But the two options are not incompatible. The Government could take a stake in Chorus and the remaining shares could be distributed to Telecom shareholders. Indeed, that may be the best outcome. Nor is there a reason why Telecom shouldn’t be allowed to retain a minority stake in Chorus under that or any other scenario. The more investors the merrier.

I am supportive of structural separation of Telecom. And I believe the preferable way to do it, is to issue all existing share-holders direct shares in Chorus. Over time they would attract infrastructure investors seeking lower but safer returns, while Telecom would attract investors in a competitive higher profit arena.

I would place a limit of any “customer” of Chorus owning more than a certain percentage – say 5% or 10%.

It makes no sense for the Government to set up a separate fibre company to partner with a demerged Chorus to lay fibre to three-quarters of New Zealand under its ultrafast broadband (UFB) investment initiative. After talking to Mr Reynolds following the investor briefing, it is clear that is not what he is suggesting.

“We see a demerged business, somewhat related to the existing Chorus, containing both copper and fibre into which the Government and Crown Fibre Holdings could invest on a nationwide basis and with which others could partner. The concept is you are building one national access business that has copper and fibre in it.”

This is certainly an option. One could put the $1.5 billion into Chorus as capital, with special shares not requiring a dividend (for example).

However one has to also be careful with assuming that even a structurally separated Chorus is automatically the most efficient and effective provider of fibre to the home in all areas.

From what I have seen (including a detailed study of the likely costs), electricity lines companies (such as Vector) will be able to roll out fibre to the home considerably cheaper than telecommunication companies due to their existing assets and resources consents. Vector for example has a strong case in Auckland.

There may be a win-win though if Chorus sub-contracted work in certain areas to companies such as Vector and Citylink, if they can do the job more efficiently. Maybe Vector would even want to take a stake in a separated Chorus?

We also have Axia from Canada in the fray, with considerable experience in rolling out fibre. They also may be offering a cheaper or better option than a separated Chorus. I don’t know, not having seen their bids.

I regard it as a major plus, that the process to date has led to Telecom willing to go down the structural separation path. However that does not mean they are automatically the successful bidder.

The decisions in this area will have a profound impact on NZ infrastructure for the next 30+ years. For my 2c the Government should not rush into a decision. It is much more important to get this right, than to worry about whether or not the actual roll-out starts on schedule.

Communications Minister Steven Joyce appears genuinely chuffed with the financial model for the ultrafast broadband initiative that he and his team of cerebral but experienced advisers have dreamt up.

The plan released on Wednesday is certainly ingenious.

The fact Steven is one of the very few MPs that has owned and run a major business, made him the ideal Minister for this portfolio.

The Government will, if necessary, foot the entire bill for rolling out fibre-to-the-street, minus any construction overruns, while private investors in local fibre companies (LFCs) will only buy back their share of the infrastructure as they connect up homes and businesses.

That could help nullify the “Catch 22″ that threatened to leave the initiative stillborn – private investors couldn’t guess their return without knowing how ubiquitous the national network would be, which would depend on other investors’ assessment of their likely return.

And Steven has first hand experience of the need for commercial investors to be able to estimate returns.

There is another reason to take the initiative more seriously.

Instead of injecting a “one-off” $1.35 billion into the public-private partnerships in the vain hope that would be enough to garner sufficient private investment to get the whole job done, the Government is now considering investing far more over time. Investment vehicle Crown Fibre Holdings will be to recycle receipts from private investors as they buy shares in LFCs, after the first fibre customers sign up.

The Government’s investment at any one time will be capped at $1.35b, but the total it commits over the life of the scheme could be double or triple that.

“$1.35b is what Crown Fibre Holdings will have access to in order to fund the infrastructure,” says Mr Joyce. “There is certainly the possibility that some or all of the money will be reinvested, but it’s simply too soon to say how much will be reinvested or how many times that might occur.”

Does this mean 75 per cent of people can be assured of getting fibre within 10 years? Hardly. But instead of scuppering the scheme, if $1.35b is not enough to get the job done, it might simply take longer.

This is the most critical part. The big question I, and others, have had, is what if the planned level of investment is not enough to get to 75% of NZ. Do you then scrap the plan, or do you accept a lower coverage target. The answer is neither – you just recycle the crown investment, so you get there eventually, even if it takes a bit longer.

I am going to be fascinated to see what offerings are made by the various telcos, ISPs, lines companies and local government.

Tom Pullar-Strecker misses the point, in my opinion, with his column that the Govt should ban using mobiles for satnav. He wrote:

Last week, The Dominion Post asked the Transport Ministry whether it would illegal from November to use mobile phones as satellite navigation aids in cars.

The initial response from spokesman John Summers was confusing and ambiguous. But pressed for clarification, Mr Summers consulted colleagues and came back with a clear answer:

“You asked whether a driver can look at a navigation system on a mobile phone even it is securely mounted. The answer is to this is no, not while driving.

“Under the Road User Amendment Rule 2009, you can use a mobile phone held in a cradle (including those that double as a GPS device) while driving but only to make, receive or terminate a phone call. You cannot use them in any other way such as reading a GPS map, reading email, or consulting an electronic diary.”

I would contend that was a sensible and considered position, and that Transport Minister Steven Joyce’s decision yesterday to cave in from pressure from gadget-fans and amend the rule was a mistake.

I contend it was the exact opposite, and the Minister inserting some common sense into the rule making.

Mr Joyce said it was not the intent of the rule to make it illegal for motorists to use the satellite navigation or music functions of their cellphones, “provided these are mounted in the vehicle and are manipulated infrequently”.

He met with officials and instructed them to “amend the rule accordingly”.

Mr Joyce appears to have thereby explicitly sanctioned people taking their eyes off the road and looking at instructions on their mobile phone, and tinkering with it, while their vehicle is in motion.

That is arguably more dangerous than people using unmounted cellphones to answer calls, the problem the rule change was originally designed to tackle.

Well I’m no fan of the cellphone ban anyway, but there is a big difference between using a device to chat to someone not in the car, and using a device to tell you where to drive.

If Tom thinks there should be no tinkering in cars, will he support banning all car radios?

How long does Mr Joyce believe it would be safe for people to take their eyes off the road? Say it takes 2 seconds to absorb the visual information from a smartphone doubling as a SatNav. In that time a car travelling at 50km will travel 27 metres.

That could be the two seconds during which a child steps out in front of the vehicle.

But here is where Tom misses the point. The Government has never intended to ban the use of GPS devices in cars. If we did so, we would be the laughing stock of the world as the most common consumer use of GPS is for car navigation. And imagine the impact on tourism as tourists are told they can not use GPS to find their way around – but instead have to use maps.

Incidentally far more dangerous for a driver to be looking at maps while driving, than a GPS device.

You see the stupidity of the draft rule is that using your cellphone for GPS navigation would have been illegal, but using a dedicated GPS navigation device would not be illegal. Now it is, and was, daft to differentiate. An iPhone, for example, has just as large a display screen as some dedicated GPS devices.

This makes as much sense as having a rule saying you can’t use your cellphone to take photos, but you can use a normal camera. Laws and rules should not be based on the technology, but on what it is used for.